Archive for the ‘Gov’t Spending’ Category

Government records show that tens of thousands of federal workers are being kept on paid leave for at least a month — and often for longer stretches that can reach a year or more — while they wait to be punished for (or cleared of ) misbehavior or are disputing a demotion.

Last week, the NY Times took aim at the Obama-deniers – the Dem Senatorial candidates who wont even admit that they voted for the guy (even though they voted with the guy over 90% of the time).

Specifically, the Times blasted:

But one of the reasons for his unpopularity is that nervous members of his own party have done a poor job of defending his policies over the nearly six years of his presidency, allowing a Republican narrative of failure to take hold.

Few voters know that the 2009 stimulus bill contributed heavily to the nation’s economic recovery, saving and creating 2.5 million jobs.

I can nit pick that it should be “recovered” not created … and I could point out that full-time jobs are being replaced with part-time jobs … and I could pile on by mentioning that most of the jobs are in the low pay hospitality and retail industries.

Government records show that tens of thousands of federal workers are being kept on paid leave for at least a month — and often for longer stretches that can reach a year or more — while they wait to be punished for (or cleared of ) misbehavior or are disputing a demotion.

The flap over the budget deal that cut military pensions – including those for disabled vets — resurrected an old question of mine: I’ve always wondered what retired members of the Congress and Senate got to live on when they retired.

Titled “The rise of the fourth branch of government “, the article’s central thesis:

The growing dominance of the federal government over the states has obscured more fundamental changes within the federal government itself:

It is not just bigger, it is dangerously off kilter.

Our carefully constructed system of checks and balances is being negated by the rise of a fourth branch:

An administrative state of sprawling departments and agencies that govern with increasing autonomy and decreasing transparency.

That is, the government agencies have gotten so big and sprawling that they have substantially more power over our lives than the 3 Constitutional branches of government … and they are, for all practical purposes, unmanageable and largely out-of-control.

Americans who seek to earn a living and save for the future are confused and discouraged.

Concerns of investors are asking: How does this affect my retirement fund? What about my college savings account? How does this affect my taxes? Would I be better off putting my savings under the mattress?

Firms can’t see a clear road to economic recovery ahead, so they’re not going to hire and they’re not going to spend.

It’s what economists call a “deadweight loss“.

He points to economic research that indicates U.S. economic policy uncertainty has been 50% higher in the past two years than it has been since 1985.

Despite spending hundreds of billions of dollars over the past couple of decades, the Department of Education gets the fewest favorability nods for Americans … only 40% give it a favorable rating … and its favorability rating is falling faster than any other agency.

The Education Dept’s low ratings aren’t that surprising since the U.S. is constantly reported to be trailing other developed nations in math, science and other basic skills … and since every politician lasers in on our need to fix public education (while protecting the sanctity of the teachers’ unions).

An aide to Duncan described it as a “rough back-of-the-envelope calculation,” derived by dividing the average pay and benefits of a teacher — $70,000 — by the amount — $2.8 billion — that needed to be cut in education programs.

But, school districts and states may find many ways to juggle funds or reduce expenses to avoid losing many teachers, which is what has happened during previous periods of financial stress.

Keep in mind that local taxes (i.e. real estate taxes) fund about 90% of teachers. … and, remember that most districts are now bloated with administrators feeding the Federal bear with paper.

Regarding the layoffs already occurring:

The Education Department for days was unable to cough up the name of a single school district where these notices had been delivered.

Then, Duncan appeared before the White House press corps and produced a name — Kanawha County in West Virginia.

But, no one in the county seemed to know what Duncan was talking about, including the education reporters who cover the school district for the Charleston, W.V., newspapers.

“There’s very little sequestration-related panic, at least on the education side of things,” one reporter said.

Our colleague Lyndsey Layton helped unravel the mystery.

She discovered that these were not layoffs, but rather “transfer notices” sent to 104 Title I teachers for reasons unrelated to the sequestration cuts.

Nice recap in the WSJ today outing the pork that was sausaged into the deficit-adding Fiscal Cliff Bill:

Here’s a sampling:

Michigan Democrat Debbie Stabenow was able to retain an accelerated tax write-off for owners of Nascar tracks (cost: $78 million

New Mexico’s Jeff Bingaman saved a tax credit for companies operating in American Samoa ($62 million), including a StarKist factory.

Distillers are able to drink to a $222 million rum tax rebate.

Businesses located on Indian reservations will receive $222 million in accelerated depreciation.

The WSJ gave special recognition to Chris Dodd, the former Senator who lobbied for Hollywood’s movie studios … getting a provision that allows film and television producers to expense the first $15 million of production costs incurred in the United States … this Hollywood special will cost the Treasury $430 million in 2013 and 2014.

First, while Obama won a relatively slim majority of the countrywide macro vote … the GOP won a majority of the district-by-district micro vote.

In other words, the whole doesn’t equal the sum of the parts.

Further, as argued by Jay Cost in an Insightful Weekly Standard piece, people don’t really grasp the perilous financial situation the US is in … in part, because past economic growth rates have insulated folks from the hard choice of higher taxes or lower spending.

The spending for these programs has grown 2½ times faster during the Obama presidency than in any other comparable period in American history.

To what extent might these benefits not just foster dependency but also make the economy’s performance seem less of a deciding factor in voters’ choices?

If you are concerned about your well-being and worried about a failed recovery — but getting new help from the government— do you vote for the candidate who promises more jobs or do you support the candidate who promises more government benefits?

Voters have historically set high standards and voted out incumbents not because they personally disliked them.

Rather, they’ve elected a new president because they understood the importance of a strong economy to their jobs, their income and the future prospects of their children.

Based on the economy, Mr. Obama should lose on Nov. 6. Yet it seems implausible that tens of millions of Americans who have received additional government benefits during his presidency can be completely unaffected by that largess. The election will test the relative power of private-sector aspirations and public-sector dependence.

Based on the economy, Mr. Obama should lose on Nov. 6.

Yet it seems implausible that tens of millions of Americans who have received additional government benefits during his presidency can be completely unaffected by that largess.

The election will test the relative power of private-sector aspirations and public-sector dependence.

Keep in mind that most jobs being created are relatively low paying service sector jobs … an increasing number of which are part-time … in part of duck Fed regulations and taxes (think, ObamaCare).

And, consider that an increasing number of folks feel that they are paying their fair share (or more) with the government wasting much or most of the taxes it takes in … what if those folks decide it’s not worth 60 hour weeks any more any more and shift into neutral?

This year’s election won’t be the end of the process … regardless of the outcome.

There has been so much talk about welfare recently that I did some digging … not to judge good or bad, simply to to get some facts.

You can draw your own conclusions …

* * * * *Overview

According to Congressional testimony given by the Heritage Foundation, “welfare” refers means-tested federal programs providing cash, food, housing, medical care, social services, training, and targeted education aid to poor and low income Americans.

Means-tested programs are anti-poverty programs: they are intended to increase the living standards of improve the capacity for self-support among the poor and near-poor.

Means-tested welfare spending or aid to the poor consists of government programs that provide assistance deliberately and exclusively to poor and lower-income people.

For example, food stamps, public housing, Medicaid, and Temporary Assistance to Needy Families are means-tested aid programs that provide benefits only to poor and lower-income persons.

Non-welfare programs provide government benefits and services for the general population — all income levels.

For example, Social Security, Medicare, police protection, and public education are not means-tested per se.

But, Social Security benefit pay-out rates are lower for higher income people and Medicare premiums are higher for higher income people

There are 69 means-tested welfare programs operated by the federal government:

12 programs providing food aid;

10 housing assistance programs;

10 programs funding social services;

9 educational assistance programs;

8 programs providing cash assistance;

8 vocational training programs;

7 medical assistance programs;

3 energy and utility assistance programs; and,

2 child care and child development programs.

* * * * *Spending

Since the beginning of the War on Poverty, government has spent $15.9 trillion (in inflation-adjusted 2008 dollars) on means-tested welfare.

In FY2011, federal spending on means-tested welfare, plus state contributions to federal programs, were about $940 billion.

Combined federal and state means-tested welfare is now the second largest category of overall government spending in the nation.

Means-tested welfare is exceeded only by the combined cost of Social Security and Medicare.

Welfare spending is greater than the cost of public education and is greater than spending on national defense.

Total means-tested spending in 2008 was $708 billion … about $7,700 to $17,100 in means-tested spending for each poor American (depending on the estimating method) … on average, around $30,000 to $33,000 for a family of four … with about 1/3 of the amount going to medical care.

In FY 2011, total means-tested spending going to families with children … was around $33,000 per low income family with children.

In recent years …

52 percent of total means-tested spending went to medical care for poor and lower-income persons,

The other half goes to lower-income families with children, most of which are headed by single parents.

Most of these lower-income families have some earned income. Average earnings within the whole group are typically about $16,000 per year per family.

If average welfare aid and average earnings are combined, the total resources available come to between $40,000 and $46,000 for each lower-income family with children in the U.S. … about 15% below the total population’s median household income.

If you’ve got a family of 4 and you’re busting your hump 40 or 60 hours a week – maybe 2 jobs — to make $45 grand and make ends meet … if Obama gets re-elected, just quit.

Kick back … take the handouts and enjoy life.

You can make just as much just sitting around …

If you don’t, those who are just riding the train will be laughing at you.

Why keep hitting your head against the wall?

Paraphrased from O’Reilly 9-26-12

Struck me at the time as akin to Rick Santelli’s “We need a Tea Party” rant on CNBC.

O’Reilly tried to soften the blow by bloviating (his word) about the American work ethic and how “most Americans have too much pride to stop working … that being on the dole has a stigma attached to it”

O’Reilly’s words seemed quite hollow in comparison to Miller’s.

And, reminded me of the government government promotional campaign to counter the “pride and other beliefs” that keep people from signing up for the SNAP program and getting food stamps.

The USDA has adopted a range of strategies and programs designed to bring more people to SNAP, including taking on “pride.”

Local assistance offices have been rewarded for “counteracting” pride and pushing more people to sign up for benefits.

The Ashe County Department of Social Services in Jefferson, N.C., for example, received a “Gold” award for confronting “mountain pride” and increasing food stamp participation.

“Eventually, many accepted assistance from the Low Income Energy Assistance Program, the Qualified Medicare Beneficiary program, and others, in some cases doubling a household’s net income. In 1 year, SNAP participation increased over 10 percent.”

Overcoming “beliefs” is a stated method from the USDA to bring more people to the program.

A “Supplemental Nutrition Assistance Program (SNAP) Community Outreach Partner Toolkit” details the importance of reaching people who … have beliefs that conflict with accepting food stamps.

As Nick Cannon would say on AGT, “America has voted … via a Pew Research poll.

Despite spending hundreds of billions of dollars over the past couple of decades*, the Department of Education gets the fewest favorability nods for Americans … only 40% give it a favorable rating … and its favorability rating is falling faster than any other agency.

The Education Dept’s low ratings aren’t that surprising since the U.S. is constantly reported to be trailing other developed nations in math, science and other basic skills … and since every politician lasers in on our need to fix public education (while protecting the sanctity of the teachers’ unions).

Second lowest is the IRS … also not surprising given its adversarial role versus citizens … imagine the IRS rating once the 15,000 new agents start enforcing the ObamaCare mandates on companies and individuals.

I was surprised to see the low rating for the Social Security Administration … especially since its primary mission is handing out money. Best hypothesis I can conjure is that the SSA is generally regarded as a hassle to deal with, and probably gets the brunt of ill-feelings when folks can’t make ends meet when on Social Security.

Initially, I was most surprised to see the comparatively high score for the oft-maligned Post Office … with an 89% favorability score, it’s 10 points higher than #3 – the Center for Disease Control.

Come to think of it, the Post Office hasn’t disappointed me often – especially given the number of transactions it handles. In fact, our local Post Office and our neighborhood mail carrier provide really good service. I guess that happens when people are customers not captives, and when there is some private enterprise competitors keeping the system somewhat on its toes.

But, the bulk of additional spending over time is attributable to health & welfare entitlements, public employee pensions, education (mostly new Federal programs and administration).

Time bomb warning: Note that “Interest” on the public debt has remained proportionately constant over the 40 year period.

But, of course, the components are very different.

In 1970, there was relatively low debt but high interest rates.

In 2012, we have very high debt with historically low interest rates.

The obvious uh-oh: what happens when interest rates jump up to more “normal” levels?

In other words, spending trends seem to validate the observation that the implicit “government” mission has expanded from a relatively sharp focus on providing essential common services by (1) expanding the scope of declared “essential common services (think DOE and Dept. of Education) and (2) re-missioning to become increasingly a transfer payment hub for “safety net” entitlements.

If the President takes day trips on Air Force One to campaign, why shouldn’t GSA folks take day trips to Hawaii for ribbon cuttings?

A loyal, left-leaning reader (maybe now a former left-leaning reader) challenged the Homa Files fact-checkers as “just plain wrong” since:

The campaign reimburses the federal gov’t for the usage of Air Force One and costs associated with protection of the POTUS directly related to campaigning.

My immediate reply:

There is partial reimbursement …. the campaign pays for “incremental costs not related to official business” …. it’s not prorated …. when he gives a 30 minute Buffett Rule speech and does 3 hour long fund-raisers, the campaign doesn’t pay for 75% (or 85%) of the cost of the trip.

The act of presidential piggybacking — coupling official duties, in this case a speech on the economy, with political fundraising — was not pioneered by Obama but is prominently on display this year.

The president’s jet-setting has raised the curiosity and questions from taxpayers about who bears the sky-high costs.

Official presidential travel has traditionally been paid for by taxpayers as part of executive branch operations, while political trips and events are to be covered by a candidate’s campaign committee.

On the occasions that they mix, the costs are to be split.

“Most presidents have doubled up on trips and said they followed the law, which is a complex formula no one really understands. At the end of the day the Federal Election Commission has not been abundantly clear about how the costs of mixed purpose travel should be paid for”

As a rule of thumb, an incumbent president’s campaign is expected to reimburse the government the cost of a first class commercial airline ticket for each person riding Air Force One to or from a political event.

But the amount doesn’t come close to covering the proportional operating cost of Air Force One, or the army of Secret Service agents, White House advance teams, the fleet of Air Force cargo planes transporting the presidential motorcade or the helicopters that often ferry the president from an airport to a remote site.

Air Force One alone cost $179,750 per flight hour in fiscal year 2012.

That figure includes fuel, flight consumables, depot level repairs, aircraft overhaul and engine overhaul. Pilot and airmen salaries are not included because they are paid regardless of the plane’s use.

On a recent three-day, three-state swing that included two official events and eight fundraisers, netting more than $8 million,incurred flight costs alone of $2.1 million, based on the Air Force figure and flight times gathered from press pool reports.

The Obama campaign has reimbursed more than $1.5 million for travel so far this election cycle, according to FEC records.

Read that last paragraph carefully.

80% of the “stops” of the cited trip were campaign-related.

And, just the cost of AF One were over $2 million.

So, you’d expect that the Obama Campaign would have picked up at least $1.6 million of the costs — just for AF one, just on this one trip.

But, according to ABC, the Campaign has only picked up $1.5 million in total, for the entire campaign cycle so far.

According to theJournal of Commerce, the head of the General Services Administration (GSA) and top staff got pink slips for spending $800,000 on a Las Vegas conference.

U.S. Rep. John L. Mica (R-FL) sniffed out that “the tab even included a clown for entertainment” and huffed that “this is just the tip of the iceberg.”

Boy, that’s for sure.

Riding lower on the conference iceberg was a mindreader, leading Rep. Mica to wonder “if the $3,200 mind reader told GSA officials that blowing more than $800,000 on a Vegas conference for a few hundred bureaucrats would get them fired?”

Silly question.

Mindreaders read minds, they don’t tell fortunes.

Fortune tellers tell fortunes.

Maybe they should have hired a fortune teller …

* * * * *

P.S Yeah, the expenses sound a little high, but c’mon, man … every conference I’ve ever been to has had some entertainment … and a mindreading act isn’t exactly el primo education.

Also, while I love to pick on gov’t waste, I’m told that the GSA does a pretty solid job.

Serving cash-pinched customers can pay off due to federal government subsidies.

And finding new customers isn’t hard.

Now the poor or unemployed form a large pool of would-be customers.

With unemployment at 9.4 percent and one in six Americans living in poverty, Sprint and TracFone have seen an explosion in sign-ups for the government-subsidized free wireless services.

Applicants have to be eligible for Medicaid or several other low-income assistance programs, have a family income significantly below the local poverty level (poverty guidelines vary by state), or receive food stamps.

In October, 43.2 million received such food assistance, up 14.7 percent from a year earlier.

Despite the rules, it’s reported to be pretty easy to get one of these phones – or to get several of them. Think “no doc” mortgages with fewer controls.

One reported scam is for qualified people to sign up, sell their phones on eBay, and then go back to the government trough for another phone.

But, not to worry.

Also according to Business Week: “A staffer at the Federal Communications Commission, which oversees carriers, says the agency may consider tightening oversight and cost management of the fast-growing program.”

That’s a relief, for sure.

And, oh yeah … under consideration is extending the program to broadband service.

Incredibly, Washington is spending $2.6 million training Chinese prostitutes to drink more responsibly on the job.

Congress recently gave Alaska Airlines $500,000 to paint a picture of a Chinook salmon on a Boeing 737

Federal employees cost taxpayers $146 million each year when they upgrade to business class flights. The Government Accountability Office found that more than half of these upgrades were not properly authorized.

The government has spent $3 billion to re-sand our nation’s beaches. Advocates claim this prevents erosion and keeps the beaches attractive to tourists. But the National Oceanic and Atmospheric Administration says the sand does nothing to prevent erosion—and this sand gets swept out to sea just as easily as existing sand!

The flap over government employees’ pensions resurrected an old question of mine: I’ve always wondered what retired members of the Congress and Senate got to live on when they retired. Here’s the scoop ..:

* * * * *

Members of Congress are eligible for a pension at age 62 if they have completed at least five years of service.

Members are eligible for a pension at age 50 if they have completed 20 years of service, or at any age after completing 25 years of service.

The amount of the pension depends on years of service, an accrual rate (2.5%), and the average of the highest three years of salary.

For example, after 30 years of Congressional service and a high-3 average salary of $161,800, the initial annual Civil Service Retirement System (CSRS) pension for a Member who retired in December 2006 at the end of the 109th Congress would be:
$161,800 x 30 x .025 = $121,350

Note: It’s unclear whether the qualifier is Congressional service or civilian government service … both terms are used.

Note: Base pay for Representatives and Senators was $165,200 in 2006.

Federal law limits the maximum CSRS pension that may be paid at the start of retirement to 80% of the Member’s final annual salary

As of October 1, 2006, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service. Of this number, 290 had retired under CSRS and were receiving an average annual pension of $60,972.

In 1983, Congress passed a law (P.L. 98-21) that required all federal employees first hired after 1983 to participate in Social Security.

The law also required all members of Congress to participate in Social Security as of January 1, 1984, regardless of when they first entered Congress.

Because the CSRS was not designed to coordinate with Social Security, Congress directed the development of a new retirement plan for federal employees, called the Federal Employees Retirement System (FERS), which does coordinate a federal pension with Social Security.

A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.

Since, on average, SS benefits are typically around $24,000 annually, the total is bumped to about $60,000.

Bottom line: a typical member of Congress get a pension of about $60,000.

According to the National Taxpayers Union, the Congressional pension program is about two-to-three times more generous than the average corporate executive pension plan, .

As the headline says, Fed revenues have tripled since 1965 … that’s about 3% per annum … pretty much in line with GDP growth.

No big news there.

I added the line connecting 1965 and 2010 … note the 2 recent bulges above the long-term trend line … the first courtesy of the Clinton tax hikes and the dot-com bubble … the 2nd courtesy of the Bush tax cuts and the housing bubble.

What’s common?

Fed revs jumped during the bubbles … but, rather than the Feds treating the inflows as “found money”, they treated it as a permanent change in the revenue stream and poured it into spending programs … all of which are now apparently untouchable.

“Last week, Citizens Against Government Waste (CAGW) unveiled a national ad addressing our country’s spending addiction, the dangers of relentless deficits, and the corrosive nature of our national debt.

The ad features a chilling look at one potential future scenario if America continues on its current destructive fiscal trajectory.

The new ad is part of an ongoing communications program in CAGW’s decades-long fight against wasteful government spending, increased taxes, out-of-control deficit spending, and a crippling national debt that threatens the future and survival of our country.

CAGW plans to run the ad on major cable networks throughout the rest of 2010 and into 2011.”

The seven are Illinois, Connecticut, Indiana, New Jersey, Hawaii, Louisiana and Oklahoma.

Combined, these states added 9,700 workers to both state and local government payrolls between December 2007 and April of this year.

Companies started firing more employees than they hired in January 2008.

Employment peaked in December 2007 at 115.6 million. During the subsequent two years, companies shed 8.5 million workers, or 7.3 percent.

By contrast, from a peak of 19.8 million, state and local governments have reduced headcount by 231,000, or 1.2 percent.

What our politicians are telling us is that state and local governments are optimally sized — just right.

If tax revenue declines, well, then we’ll just have to find more taxes and fees to replace it.

We couldn’t possibly look at the cost-of-labor side of the equation.

If you really want to provoke outrage, you have to take into consideration public pensions.

Generous and bloated are the terms that have been used to describe them … What’s clear is that such pensions and benefits now seem unaffordable, because those responsible — state and, sometimes, local governments — didn’t put away enough, or haven’t invested wisely enough, to pay for them.

In case you missed it last nite, our government spent $2.5 million of our tax dollars (the equivalent of 50 firefighters for a year)on a ridiculous 30 second spot for the 2010 census … part of a $340 million ad campaign. Ouch.

Ken’s Take: Next to the government just flat out wasting money, my worry is the burgeoning debt. Some debt – ok. But, staggering levels not ok.

When I ask students why they’re unfazed, they admit that the sums are so large that “it’s more like Monopoly money” or”payback is so far off that’s it’s not worth worrying about”.

Somebody is eventually going to have to pay the piper …

* * * * *

Excerpted from IBD, “Why No Focus On Huge Ongoing Debt?”,
May 15, 2009

Since 1961 the federal budget has run deficits in all but five years. But the resulting government debt has consistently remained below 50% of GDP; that’s the equivalent of a household with $100,000 of income having a $50,000 debt. Adverse economic effects, if any, were modest.

By 2019, the ratio of publicly held federal debt to gross domestic product (GDP, or the economy) would reach 70%, up from 41% in 2008.

The CBO, using less optimistic economic forecasts, raises these estimates. The 2010-19 deficits would total $9.3 trillion; the debt-to-GDP ratio in 2019 would be 82%.

By CBO’s estimates, interest on the debt as a share of federal spending will double between 2008 and 2019, from 8% of the total to 16%.

One reason Obama is so popular is that he has promised almost everyone lower taxes and higher spending. The president doesn’t want to confront Americans with choices between lower spending and higher taxes — or, given the existing deficits, perhaps less spending and more taxes.